Monday Markets: Geopolitics, Tariffs & Trading Opportunities

Morning, legends!

Samuel Leach here—your guide to all things markets, money, and mayhem. It’s Monday morning, so grab your tea (because, let’s be real, tea beats coffee every time), and let’s dive into what’s moving the markets this week.

Geopolitical Fireworks – Ukraine, Trump & European Leaders in the Spotlight

If you thought last week was wild, buckle up. European leaders have scrambled to form what’s being called a “coalition of the willing” to secure Ukraine’s future amid growing fears that Trump’s America may be stepping back from the fight.

• UK Prime Minister Keir Starmer hosted an emergency summit in London this weekend, bringing together European leaders, including Zelenskiy and Macron, to discuss defense spending hikes and security plans.

• Britain and France are taking the lead in developing a plan to “stop the fighting,” as Trump’s Oval Office bust-up with Zelenskiy raised serious concerns about the US’s long-term commitment to Ukraine.

• The UK pledged £1.6 billion ($2 billion) in aid, including over 5,000 air-defense missiles, while Starmer emphasized the need for Europe to step up as Putin only understands strength.

Markets aren’t loving this instability. Risk sentiment remains shaky, and investors are eyeing safe havens while keeping a close watch on the next European Council meeting on Thursday, which could approve a €20 billion ($21 billion) military package for Ukraine.

Trade Wars 2.0 – Trump’s Tariff Barrage Hits Markets

🔥 US Tariffs Incoming – Trump is escalating the trade war with sweeping new tariffs on Canada, Mexico, and China set to kick in on Tuesday.

• Canada & Mexico: 25% levies on most imports (except Canadian energy, which faces 10%).

• China: Tariffs doubled to 20%, sparking threats of retaliation.

• The Impact? Global supply chains are about to get a shake-up. North American auto, metals, and agriculture sectors are bracing for turbulence.

With inflation still stubborn, stocks wobbly, and consumer sentiment dipping, a fresh tariff war could be the catalyst for a bigger market correction. Keep your risk management tight.

Markets in Motion – Key Movers & What’s Next

📈 Bitcoin's Wild Ride – Just when it looked like Bitcoin was in trouble, Trump threw a lifeline to the crypto market. On Sunday, he announced plans for a strategic crypto reserve, sending Bitcoin surging 9% to $94,000, while Ethereum spiked 13% above $2,500. The biggest winners? XRP, Solana, and Cardano, which saw explosive rallies after Trump confirmed their inclusion in the reserve. But as with all things crypto, expect volatility—if the details of Trump’s plan disappoint, markets could reverse just as fast.

💰 Gold Losing Its Shine – After an eight-week rally, gold is finally retreating, slipping from record highs ($2,956) to $2,833. A break below $2,790 (50% Fibonacci extension) could signal further downside, though history tells us gold always comes back when inflation or war fears spike.

📊 Stocks & Yields – The S&P 500 is clinging to gains, but caution is in the air. Treasury yields dipped as traders position for slower growth, but with all this geopolitical drama and inflation uncertainty, expect more chop ahead.

💷 GBP/USD Holding Firm – The pound was the best-performing G10 currency last week, even with a 0.3% loss against a stronger USD. Starmer’s Washington visit went well, focusing on trade cooperation rather than tariffs, giving markets a sigh of relief.

What to Watch This Week

🌍 Geopolitics: Will Europe step up to replace the US in supporting Ukraine? A messy, drawn-out transition could rattle markets further.

📈 ECB Rate Cut? The European Central Bank is expected to lower rates by 25bps this week, but US tariffs could complicate the inflation picture, possibly delaying future cuts.

💾 Tech Earnings: The AI bubble’s still got legs, but Nvidia’s stumble showed that even the big dogs aren’t immune to sentiment shifts.

💹 USD/JPY Action: The pair pulled back from 150.95 as inflation slowed, but traders are eyeing the March 19 FOMC meeting for the next big move. Will Powell hold rates steady, or are we about to see a Fed pivot?

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Bottom Line?

The markets are moving fast, and opportunities lie in volatility. Whether you’re trading the swings or riding out the storm, staying informed and managing risk is key.

Catch you all soon—keep it real, keep it profitable.

Cheers,
Samuel Leach